Examination No: 1000366

Words: 3,486

Land Law Assignment

The concerns of Cliff Caves broach many issues central to the nature and extent of freehold estates. With respect to these concerns it is appropriate, firstly, to address the concept of estate and the question of the possibility, and constitutionality, of absolute ownership of land. It will then be permissible to turn to the creation and the nature of the fee simple, its various modifications, in addition to some of the rights and restrictions burdening the owner of such an estate. We will then address the extent of Cliffs estate by examining the various possibilities surrounding fee farm grants in terms of both annual rentcharges and covenants. Having done this the issue of ground rents and the constitutionality of the legislation affecting them will be addressed. Finally, as there is no information regarding the date of acquisition all of these issues must be examined in light of both the reform of the law which was enacted by the Land and Conveyancing Law Reform Act 2009, and the law as it stood prior to that enactment.
1

1. The Concept of Estate and the Absolute Ownership of Land

The concept of an estate denotes the nature and extent of an interest in land. An estate is recognised in law as four dimensional entity comprising both the physical boundaries of the land and the temporal duration of the interest. What this means is that the various categories of freehold estate, for example, the fee simple or fee farm grant, are not merely distinguished on the grounds of the nature of the particular interest but also on its duration or extent. In Walsinghams Case the courts have given expression to this characteristic: [T]he land itself is one thing, and the estate in the land is another thing, for an estate in the land is a time in the land, or land for a time, and there are diversities of estates, which are no more than diversities of time. In addition to linking the nature of an estate to is temporal duration, this extract from Walsinghams Case also distinguishes the land itself, that is, the actual physical entity from the abstract notion of an estate in land. The LCLRA 2009 retains the concept of estate at s10(1) and Explanatory Memorandum of the LCLRA 2009 states (at p.3) that The notion of dividing ownership according to different periods of time is what makes land ownership under a common law system flexible. It enshrines the fundamental principle that what is owned is not the physical entity, the land, but rather some estate or interest.
3 2

Thus, the impossibility of absolute ownership of land is derived, in a sense, from this temporal dimension of the concept of an estate.

1 2

From here on LCLRA 2009 or 2009 Act. Lyall first page of Ch. 4 for citation 3 Wylie takes the same view, see: chapter 4, paragraph 4.22 1

Examination No: 1000366

Words: 3,486

Ultimately Article 43 of the Constitution provides that the State may delimit by law the exercise of these [property] rights with a view to reconciling their exercise with the exigencies of the common good . A recent article on the subject has found that redistribution of private property in the interests of social justice was clearly regarded by the drafters as a permissible basis for limiting private ownership. Albeit, the fee simple remains the largest [estate] recognised by the common law, and the nearest it ever came to recognising absolute ownership *of land+.
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2. The Fee Simple

The fee simple estate is the largest freehold estate known in Irish land law not merely because it is the one that has the potential to last the longest but also because it bestows the widest powers of enjoyment in respect of all the advantages to be derived from the land itself and from an ything found on it. The owner of a fee simple benefits from two core rights that are responsible for his or her extensive powers of enjoyment, firstly, the right of alienation and secondly the right to everything in, on or over the land. However, before examining these rights it would propitious to examine how a fee simple is created. (a) The Creation of a Fee Simple Since the Real Property Act 1845 a fee simple has usually been created by deed. In fact, s62(1) of the LCLRA 2009 provides that a legal estate or interest in land may only be created or conveyed by a deed and at subsection 2 that such a deed, once it has been executed after the commencement of the 2009 Act is fully effective for such purposes.
8 9 7

Section 123 of the Registration of Title Act 1964 in addition to s67 of the LCLRA 2009 provide for the passing of estates without the use of words of limitation. What this phrase refers to is the fact that in order to convey an ordinary fee simple at common law the correct words of limitation had to be included. As Lyall points out: To pass the fee simple a grant had to be made to a grantee and his/ her heirs. Nothing else would do. Thus, at common law and prior to the commencement of the 1964 Act, in order to convey an fee simple one had to use specifically those words of limitation, after the 1964 Act it was only necessary to do so for unregistered land and finally with the commencement of the s67 of the LCLRA 2009 the requirement for words of limitation has effectively been abolished, although they may still be used. The purpose of s67, according to Wylie, is to save conveyances which would otherwise fail to achieve their primary purpose of conveying a fee simple through a failure to use words of limitation, furthermore, s67(4) allows this curative affect to act retrospectively.
11 10

4 5

6
7

Wylie; paragraph 1.85. Walsh; p.1.

LCLRA 2009 Explanatory Memorandum; p.5.

Wik Peoples v. Queensland [1996] 187 CLR 1 (HC of Australia) per Gummow J; see also: Lyall p.64. 8 Section 63 provides for certain exceptions which do not need to be explored here. 9 From here on the 1964 Act 10 Lyall, p.184. The term heirs is used merely to signify a spes successionis or the hope of inheriting as nemo est heres viventis no one can inherit from the living. 11 Wylie; at paragraph 4.31. 2

Examination No: 1000366

Words: 3,486

(b) The Rule against Inalienability Alienation refers to the right to dispose of ones interest in land. Since Quia Emptores 1290 it has been the position of the law that the holder of a fee simple cannot be restricted in this respect. For example in Byrne v. Byrne a testator left a fee simple to his nephew but specified that In the event of my nephew attempting to sell the said farms or in any way parting with the possession of them, I revoke the bequest of the said farms to him and in that event I leave them to the next heir on the same condition. This restriction on alienation was held by Budd J as being repugnant to the nature of the fee simple and was therefore void. The LCLRA 2009 has retained the rule against inalienability at s9(4) where it states that A fee simple remains freely alienable in its Memorandum it explains that this means the owner of the largest freehold estate, the fee simple, is free to dispose of it (at p.4). However, if the restriction on alienation is not absolute it is a question for the court as a matter of public policy whether it is so restrictive as to be void. In deciding this the court has to balance the competing interests of free disposition of property by grantors and the general policy of ensuring marketability of freehold land.
13 12

An example of the Courts holding a restrictive covenant in a fee simple not to be repugnant to the right of alienability can be found in Fitzsimons v. Fitzsimons
14

where a testator, before his death, transferred a

substantial portion of his 182 acre farm in fee simple to his son. In his last will, he devised a devise in remainder to the plaintiff conditional upon "him being the beneficial owner for a like estate transferred by me to him during my lifetime." Subsequent to the testator's death, the plaintiff was made an offer for the sale of half an acre of the land transferred to him. It was held by Keane J, in construing the will that the condition was not repugnant to the estate granted since it did not prevent him from selling all or any part of the lands. (c) The Right to Everything on, in or over the Land This right has its roots in the Latin brocard cuius est solum, eius est summitas usque ad coelum. Of late the soundness of this principle has been subject to question. However, both its soundness and the restrictions to which it qualifies a fee simple were addressed in the Supreme Court of the UK by the Deputy President Lord Hope, who was of the opinion that the brocard still has value in English law It is an imperfect guide, as it has ceased to apply to the use of airspace above a height which may interfere with the ordinary user of land As a general rule anything that can be touched or worked must be taken to belong to someone .
18 17 16 15

12 13

[1953] 87 ILTR 183. Wylie; at paragraph 4.55. 14 [1993] ILRM 478. 15 The principle was firmly established in common law by Lord Edward Coke in Bury v. Pope Cro. Eliz. 118 [1588] and 78 ER 375 [1586] per the reporters note, and was adopted in a number of judgements in the 19th century. See the judgement of Lord Wilberforce in Commissioner for Railways v Valuer-General [1974] AC 325 at p.351. 16 Commissioner for Railways v Valuer-General [1974] AC 325 at p.351 17 Star Energy Weald Basin Limited and Anor v. Bocardo SA [2010] UKSC 35. 18 Star Energy Weald Basin Limited and Anor v. Bocardo SA; p.12 The ruling on airspace which is referred to by Lord Hope can be found in Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479. 3

Examination No: 1000366

Words: 3,486

(d) Freehold Covenants and Successors in Title Prior to the LCLRA 2009 there were different rules in common law and in equity with regard to covenants as well as distinct conditions and possibilities of enforcement. Originally the basic principle at common law was that the benefit could pass to a successor in title in certain circumstances, while the burden could not. However, the rule in Tulk v. Moxhay offered a partial equitable solution to this problem although this solution is held to be subject to major limitations. One such limitation for example was that the rule permits the burden of only restrictive (or negative) covenants to pass to successors in title to the original covenantor. Furthermore, with the exception of leasehold provisions applying to certain fee farm grants, prior to the 2009 Act, freehold covenants could not be enforced via statute.
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The law was significantly changed by the ss48-50 of the LCLRA 2009 with the purpose, according to Murphy J, of correcting what had been long recognised as a major defect in our land law and conveyancing system which will, according to Mee and Murphy, completely recast the rules in relation to freehold covenants, ensuring that the benefit and the burden of both positive and negative covenants would pass to successors in title. The Explanatory Memorandum makes it clear that the new provisions replace the old law, including the limited rule in Tulk v. Moxhay while going on to state that s49(2) contains the new law which makes freehold covenants bind successors fully, in the sense that the benefit will run with the land intended to be benefited and the burden will run with the land subject to the covenant.
26 25 24 23

3. Modified Fees
(a) The distinction between determinable and conditional fees As Wylie explains: A determinable fee is a fee simple which will determine automatically on the occurrence of an event which may or may not happen.
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A fee simple upon a condition, often called a conditional fee, is a fee simple to which is attached a condition subsequent, which may cause the estate to be brought to an end *it+ is a condition which may result in forfeiture of an estate already vested in the grantee.
19 20

28

[1884] 2 Ph 774. Law Reform Commission Report on Land Law and Conveyancing: Positive Covenants over Freehold Land and Other Proposals; p.6, paragraph 1.07. 21 Ibid; p.7, paragraph 1.08 22 Ibid; p.6, paragraph 1.07. See, for example, Gaw v. CIE [1953] IR 232. 23 Cardiff Meats Ltd v. McGrath & Ors [2007] IEHC 219; p. 16. 24 Mee & Murphy; p.2. 25 At p.26. 26 The Memorandum goes on to note that Generally the benefit and burden will attach to the owner for the time being of the lands in question so long as they are such owners. However, a person who has ceased to be the owner of the benefited land may enforce breaches of covenant which occurred before he or she ceased to be the owner. Similarly, a person may be liable for breaches which occurred while the owner of the land was subject to the covenant, but which are pursued after that person ceased to be owner of that land (at p.26). 27 Wylie; paragraph 4.47. 4

Examination No: 1000366

Words: 3,486

(b) The LCLRA 2009 These modified fees, in addition to the rights of re-entry which follow a conditional fee and the possibility of a reverter, that is, fees simple with qualifications, have been retained as legal estates by s11 of the LCLRA 2009. It ought to be noted, however, that as early as 1892 judges such as Porter MR in Re Kings Trusts were labelling this distinction as little short of disgraceful to our jurisprudence while holding that it points to the unsatisfactory state of the law. Wylie holds that comments such as these were uttered with the vista toward the making of wills. Nevertheless, the conditions or limitations contained in such modified fees are voidable and the Courts have voided such restrictions on numerous occasions on grounds of constitutionality or, as in Re Dunnes Estate, for public policy reasons.
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4. Fee Farm Grants

According to Wylie a fee farm grant is a conveyance of a fee simple subject to payment by the grantee and his successors in title to the grantor and his successor s in title of a perpetual rent.
31

Section 12 of the LCLRA 2009

prohibits the future creation of a fee farm grant in law or equity and states that any such attempt will vest in the grantee the legal or equitable fee simple while simultaneously discharging any covenants or rents which are repugnant to the nature of a fee simple. This section does not affect existing fee farm grants however a fee farm grantee may use the legislation to buy out the rent and become relieved of the covenants in the grant.
32

(a) Rentcharge Fee Farm Grant A rentcharge is created in the conveyance of a fee simple and obliges the grantee and his or her successors in title to pay a particular sum of money to the grantor. This burden on the land of the grantee does not create either the relationship of landlord and tenant or any form of feudal or leasehold tenure.
34 33

In terms of covenants, in Re Lunhams Estate , it was held that a covenant which restricts the grantee from dividing the premises into four or more lots is repugnant to the free power of alienation necessarily implied in the fee farm grant. Flanagan J noted that In legal effect [the fee farm grant] is simply a grant of certain premises in fee simple, and a re-grant of a rent-charge which implies that the law in relation to fee farm grant covenants is the same as that which is applicable to ordinary fees simple. The LCLRA 2009 s41 prohibits the future creation of rentcharges subject to the exceptions listed in subsection (2).
37 36 35

28 29

Wylie; paragraph 4.49. [1892] 29 LR Ir 401. 30 Re Kings Trusts; at p.410. 31 Wylie; at paragraph 4.58. 32 LCLRA 2009 Explanatory Memorandum; p. 9. 33 See: Lyall; p.242-3 and Wylie; paragraph 4.107. 34 [1871] IR 5 Eq 170. 35 Re Lunhams Estate; at p. 170. 36 Ibid; at p.171. 37 Lyall; p.243. 5

Examination No: 1000366

Words: 3,486

(b) Deasys Act Fee Farm Grants The passing of the Landlord and Tenant Law (Amendment) Act (Ireland) 1860, ubiquitously known as Deasy s Act was a significant factor in the rise in popularity of fee farm grants in Ireland such that they remain the largest surviving fee farm grants existing in Ireland today. The reason for this popularity, according to both Wylie and Lyall, stems from the wording of s3 of the Act which provides that a reversion shall not be necessary
40 39 38

in order to establish the relation of landlord and tenant. This section facilitated the creation of a
41

new category of fee farm grant, one where the grantee obtained the fee simple, but was subject to perpetual rents and specific covenants such that the estate is freehold but the tenure is leasehold.
42 43

As the Law

Reform Commission point out, such grants are still made in modern times and according to ss12 and 13 of Deasys Act the successors in title are bound by the covenants.

Section 52 of Deasys Act, which provided for proceedings for ejectment for non-payment of a year's rent, was modified by the Landlord and Tenant (Ground Rents) Act 1978 (No.2) , firstly, by qualifying the rent reserved thereon as a ground rent, and secondly, by providing that where a person is entitled to acquire the fee simple in a dwellinghouse s52 of Deasys Act no longer applies. Furthermore, since s3 of the 1978 Act specifically includes a fee farm grant under the concept of a lease the overall effect of this legislation thus enables a Deasys Act grant to be enlarged into a fee simple free from ground rents and certain covenants.
47 46 45 44

Section 9(4) of the 2009 Act retains the rule against inalienability with respect to the fee simple and s50, which acts retrospectively, entitles a person subject to a freehold covenant to apply for a court order discharging it in whole or in part or modifying it on the ground that it now constitutes an unreasonable interference with the use and enjoyment of the land subject to it.
48

5. Ground Rents and the Constitutional Challenge

Professor Wylie has recently held that the term "ground rent" is not a term of art and is not defined in the legislation.
49

He stated that "it is used generally speaking to mean a rent that is reserved on a long term lease
50

which is relatively low because all that is being leased is the ground." Forfeiture of rent can result in ejection

38 39

Lyall; p.238. See: Wylie; paragraph 4.94 and Lyall; p. p238. 40 Wylie; paragraph 4.94. 41 Lyall; p.238. 42 Law Reform Commission Consultation Paper on the Reform and Modernisation of Land Law and Conveyancing Law 2004; p. 19, paragraph 1.15. 43 See: Wylie; paragraph 4.103. 44 From here on the 1978 Act. 45 Thus modifying s52 of Deasys Act. 46 See: s27(1) of the 1978 Act. 47 The covenants which it will not be freed from are specified in s28 of the 1978 Act. As Lyall notes: A person with a Deasys Act grant already has a fee simple vested in them, but the policy of the 1978 Act is that the tenant under the Act is the substantial owner of the property and so should not only be entitled to the fee simple free of rent, but also that a mere holder of ground rent should not be able to disturb the possession of such an owner (at p.240). 48 LCLRA 2009 Explanatory Memorandum; p.27. 49 Shirley v O'Gorman & Ors [2006] IEHC 27; at p.65.. 50 Shirley v O'Gorman & Ors; at p.65. 6

Examination No: 1000366

Words: 3,486

proceeding being taken against the tenant in accordance with s52 of Deasys Act. Section 8 of the 1978 Act, conditional upon s9, confers the right to purchase the fee simple on persons listed in ss9-16 of the Act and s7 of the Landlord and Tenant (Amendment) Act 1984, in particular s7(3),determines the purchase price thereof. In Digital Hub Development Agency v. Keane ONeill J held that if the fee simple owners right to possess is remote then only a very small portion of the value *of the property+ should be reflected in the purchase price.
54 52 53

51

In the recent case of Shirley v O'Gorman & Ors ground rents legislation was subjected to constitutional challenge on a number of bases. Peart J significantly analysed the landlords interest by way of income stream rather than an entitlement to future possession, stating that what is being valued in reality is the residual interest of the landlord in the premises, and that for all reasonable purposes this can be seen as the income stream to which the landlord is entitled.
56 55

This characterisation of the landlord's actual interest as an income stream rather than a realisable future right of possession redirects the constitutional debate from one about interference to one regarding monetary compensation where the grantee wishes to buy out ground rents. Ultimately Peart J was not satisfied that the presumption of constitutionality which attaches to the legislative scheme has been rebutted, and held that a social justice principle lies behind the legislation, even one that endures still. On appeal, the Supreme Court have upheld Peart Js decision on the basis that the appellants had no standing. Mr Justice Fennelly for the five judge Supreme Court held that the section being challenged was reasonably open to an interpretation consistent with the appellants constitutionally protected property rights.
58 57

It is now possible to examine the facts of the case in light of the law as discussed above. Firstly, with respect to Ms Lakes insistence that the residents stop paying ground rents on the basis that they are unconscionable and unconstitutional, it has been held by the Supreme Court in Shirley v O'Gorman & Ors that the legislation with respect to ground rents is indeed constitutional, furthermore, on the foot of the decisions in Digital Hub Development Agency v. Keane and Bank of Ireland v. Lady Lisa Ireland Ltd it would be more advisable to buyout the fee simple at a potentially minimal percentage of the value of the property than risk being ejected

51 52

See: Bank of Ireland v. Lady Lisa Ireland Ltd [1992] 1 IR 404; at p.404. Subject to the qualifications listed in s7 the purchase price shall be the sum which, in the opinion of the arbitrator, a willing purchaser would give and a willing vendor would accept for the fee simple. 53 [2008] IEHC 122 at p.31. 54 ONeill J set the buyout price at 5 per cent the value of the property. 55 The central contention was the manner in which s10(2) of the 1978 Act links the rent to the rateable valuation is unconstitutional in as much as the section for the first time made this link one of the criteria for eligibility to acquire the fee simple (at p.63). 56 Shirley v O'Gorman & Ors; at p.65-6. 57 Ibid; p. 62. 58 rd Irish Times, February 3 , Supreme Court rejects ground rent law challenge: http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html (accessed on 6/2/1012). For a more extensive analysis of the High Court decision see: Buckley, N. F. Ground Rents Revisited. 7

Examination No: 1000366

Words: 3,486

from the property for forfeiture of payment. Finally, the question of whether ground rents are unconscionable is a matter for the legislature.
59

Secondly, with respect to Professor Pooles estate, the question relates to (i) whether she holds a fully marketable title and (ii) whether she can do what she likes with her property. In terms of (i) there is are various possibilities that could severely affect the marketability of Professor Pooles estate , for example, she could have been transferred, or inherited, a modified fee until such time as she becomes a Professor or upon the condition that some of the land be used for the extraction of turf, these modifications on the Professors estate would lessen its marketable value in the sense that the covenants could pass to the successors in title. In terms of (ii) there are several possibilities restrict or burden the Professor Pooles estate, firstly, it is possible that pre-2009 equitable burdens run with the land; secondly, if she acquired the land after the commencement of the 2009 Act she would be bound to any burdens as a successor in title; thirdly, in terms of the alienability of the estate, it is possible given then ruling in Fitzsimmons that there are partial restrictions on the alienability of the estate; finally; there are other implied burdens on the use of the land, for example, with respect to the use of airspace.
60

Thirdly, with respect to Cliffs concerns regarding the rent charges and covenants on his fee farm grant, he has to pay the rent and comply with the covenants because the law holds them to be inherited by successors in title. However, it is possible under the 2009 Act to buy out the rentcharges and to discharge those covenants that are unduly onerous or repugnant to the nature of a fee simple, furthermore, if Cliffs estate is a Deasys Act fee farm grant it can be enlarged and freed of ground rents and certain covenants. Finally, as already noted, even if Cliff acquires an ordinary fee simple there may still be covenants both implied or explicit restricting and burdening the land. Finally, Cliffs belief that the Constitution protects that right to absolute ownership of property is somewhat misplaced. The Constitution, while it protects the right to ownership of private property, does not protect the right to absolute ownership and, in fact, expressly limits such ownership.

59

There has indeed been much debate on the issue, for example, see: http://historicaldebates.oireachtas.ie/S/0062/S.0062.196612140005.html (accessed 08/02/12). 60 This still does not exhaust the possible burdens and restrictions on the owner of a fee simple For the sake of brevity easements and profits prendre were not discussed. 8

Examination No: 1000366

Words: 3,486

Bibliography Cases:
Bank of Ireland v. Lady Lisa Ireland Ltd [1992] 1 IR 404. Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479. Bury v. Pope Cro. Eliz. 118 [1588] and 78 ER 375 [1586]. Byrne v. Byrne [1953] 87 ILTR 183. Cardiff Meats Ltd v. McGrath & Ors [2007] IEHC 219. Commissioner for Railways v Valuer-General [1974] AC 325. Digital Hub Development Agency v. Keane [2008] IEHC 122. Fitzsimons v. Fitzsimons [1993] ILRM 478. Gaw v. CIE [1953] IR 232. Re Kings Trust [1892] 29 LR Ir 401. Re Lunhams Estate [1871] IR 5 Eq 170. Shirley v O'Gorman & Ors [2006] IEHC 27. Star Energy Weald Basin Limited and Anor v. Bocardo SA [2010] UKSC 35. Tulk v. Moxhay [1884] 2 Ph 774. Walsinghams Case [1573] 2 Plowden 547. Wik Peoples v. Queensland [1996] 187 CLR 1

Books, Articles & Reports:

Buckley, N. F.(2009) Ground Rents Revisited Conveyancing and Property Law Journal, 14(1) 6. http://historical-debates.oireachtas.ie/S/0062/S.0062.196612140005.html (accessed on 08/02/12). Irish Times, February 3 , Supreme Court rejects ground rent law challenge: http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html (accessed on 6/2/1012). Law Reform Commission (LRC CP 34 - 2004) Consultation Paper on the Reform and Modernisation of Land Law and Conveyancing Law. Law Reform Commission (LRC 70 - 2003) Report on Land Law and Conveyancing: Positive Covenants over Freehold Land and Other Proposals. Lyall, A. (2010) Land Law in Ireland. 3 Ed, Round Hall (Dublin). Mee, J & Murphy, A. (2007) Reform of the Law of Covenants. Conveyancing and Property Law Journal, 12(4) 100. Wylie, J. C. W. (2010) Irish Land Law. 4 Ed, Bloomsbury Professional (Dublin). Walsh, R. (2010) Private Property Rights in the Drafting of the Irish Constitution: A Communitarian Compromise. Dublin University Law Journal, 18(1) 86.
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